v3.26.1
Fair Value Measurement
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurement Fair Value Measurement
Accounting standards establish a hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 - Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.
The carrying value of cash and cash equivalents, restricted cash, accounts receivable, contract assets, contract liabilities, accounts payable and DOE Loan Facility are considered to be representative of their fair value.
The following tables set forth the Company's financial liabilities measured at fair values based on the fair value hierarchy, as described above. These should also be read with Note 2, Summary of Significant Accounting Policies, in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
June 30, 2026
December 31, 2025
Level 1Level 2Level 3Level 1Level 2Level 3
Liabilities
SPA Warrant (a)
$— $— $254,031 $— $— $470,715 
April, May and December 2023 Warrants— — 135,362 — — 313,253 
Delayed Draw Term Loan— — 163,283 — — 150,427 
Embedded derivatives(b)
— — — — — 228,719 
Contingently issuable securities(c)
— — 35,662 — — — 
Total liabilities$— $— $588,338 $— $— $1,163,114 
(a) Included in Warrants liability - Related party on the Unaudited Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025.
(b) Included in Notes Payable - Related Party on the Unaudited Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025.
(c) Included in Other liabilities on the Unaudited Condensed Consolidated Balance Sheets as of June 30, 2026.
April 2023 warrants, May 2023 warrants and December 2023 warrants
The April 2023 warrants, May 2023 warrants and December 2023 warrants all are valued using the Black-Scholes model at inception and on subsequent valuation dates. This model incorporates inputs such as the stock price of the Company, risk-free interest rate, volatility and time to expiration. The volatility is a significant unobservable input classified as Level 3 of the fair value hierarchy.
The inputs used to determine the fair value of the April 2023 warrants, May 2023 warrants, and the December 2023 warrants are as follows:
April 2023 warrants
June 30, 2026
December 31, 2025
Time to expiration2.29 years2.79 Years
Common stock price$5.88 $11.46 
Risk-free interest rate4.1 %3.5 %
Volatility115.0 %105.0 %
May 2023 warrants
June 30, 2026
December 31, 2025
Time to expiration2.04 Years2.54 Years
Common stock price$5.88 $11.46 
Risk-free interest rate4.1 %3.5 %
Volatility115.0 %105.0 %
December 2023 warrants
June 30, 2026
December 31, 2025
Time to expiration2.46 Years2.96 Years
Common stock price$5.88 $11.46 
Risk-free interest rate4.1 %3.5 %
Volatility115.0 %105.0 %
Embedded derivatives
The Company estimated the fair value of the embedded conversion features in the November 2025 Convertible Note using a binomial lattice model at inception and on subsequent valuation dates. This model incorporates inputs such as the stock price of the Company, dividend yield, risk-free interest rate, the effective debt yield and expected volatility. The effective debt yield and volatility involve unobservable inputs classified as Level 3 of the fair value hierarchy.
The November 2025 Convertible Notes conversion is able to be settled in the Company’s own stock as of June 3, 2026, as such there is no embedded derivative liability at June 30, 2026.
The inputs used to determine the fair value of the embedded derivative liabilities are as follows:
November 2025 Convertible NoteJune 3, 2026December 31, 2025
Term5.50 Years5.92 Years
Dividend yield— %— %
Risk-free interest rate4.2 %3.8 %
Volatility60.0 %60.0 %
Effective debt yield11.1 %11.7 %
Contingently Issuable Securities
The Company entered into an arrangement with Hudson Bay Master Fund Ltd., an affiliate of Hudson Bay Capital Management LP (“HBMF”) on June 30, 2026 for a registered direct offering to be completed in July 2026 (“Registered Direct Offering”), the proceeds from which were to be used to partially fund the Company’s capital contribution to the Frontier Power USA Parent, LLC (“FPUSA”) joint venture. As the arrangement was legally binding as of June 30, 2026, and HBMF had a unilateral termination right, the securities to be issued were recognized at fair value and an expense of $35,662 was included within Loss on contingently issuable securities within the Consolidated Statement of Operations and Comprehensive (Loss) Income and as an Other liability within the Consolidated Balance Sheets. Refer to Note 22, Subsequent Events for further discussion pertaining to the registered direct offering.
The following inputs were used in the Monte Carlo simulation to determine the fair value of the contingently issuable securities:
Contingently Issuable SecuritiesJune 30, 2026
Time to expiration10.0 Years
Common stock price$5.88 
Risk-free interest rate4.4 %
Volatility115.0 %
Quantitative information about all significant unobservable inputs used in the fair value measurement for recurring level 3 measurements:
The fair value of each draw of the Delayed Draw Term Loan was estimated using a discounted cash flow (“DCF”) method, based on the contractual cash flows discounted at a debt yield and considering the probability of achieving certain milestones.
The fair value for the SPA warrant is estimated based on its intrinsic value, using the Eos common stock closing price adjusted by a discount for lack of marketability (“DLOM”), less the exercise price of $0.01 for the SPA Warrant. A DLOM was applied considering the SPA Warrants are unregistered.

Delayed Draw Term Loan
June 30, 2026
December 31, 2025
Debt yield
11.5 %11.9 %
SPA Warrant
June 30, 2026
December 31, 2025
Discount for lack of marketability— %5.0 %
Level 3 Rollforward for Liabilities Measured at Fair Value on a Recurring Basis
The following table summarizes the changes in the fair value of liabilities that are included within the Company’s accompanying Unaudited Condensed Consolidated Balance Sheets and are designated as Level 3:
Three Months Ended June 30,Six Months Ended June 30,
2026
2025
2026
2025
Delayed Draw Term Loan
Balance at beginning of the period$113,120 $99,433 $150,427 $76,188 
Additions - January Draw
— — — 17,312 
Prepayment of the Term Loan
— (28,582)— (28,582)
Change in fair value of Term Loan50,163 (9,146)12,856 (3,213)
Balance at end of the period$163,283 $61,705 $163,283 $61,705 
SPA Warrant and Contingent Warrants
Balance at beginning of the period$203,485 $146,793 $470,715 $266,630 
Conversion to preferred stock
— — — (102,185)
Change in fair value of warrants50,546 52,191 (216,684)34,539 
Balance at end of the period$254,031 $198,984 $254,031 $198,984 
April, May and December 2023 Warrants
Balance at beginning of the period$112,777 $124,766 $313,253 $189,322 
Exercised warrants
— (1,571)(31,751)(20,339)
Change in fair value of warrants22,585 57,898 (146,140)12,110 
Balance at end of the period$135,362 $181,093 $135,362 $181,093 
Embedded Derivatives
Balance at beginning of the period$62,784 $27,462 $228,719 $44,396 
Extinguishment of the 2021 Convertible Notes embedded derivatives
— (87)— (87)
Reclassification of November 2025 Convertible Note embedded derivative(133,231)— (133,231)— 
Change in fair value of derivatives
70,447 24,264 (95,488)7,330 
Balance at end of the period$— $51,639 $— $51,639 
Contingently Issuable Securities
Balance at beginning of the period$— $— $— $— 
Loss on contingently issuable securities35,662 — 35,662 — 
Balance at end of the period$35,662 $— $35,662 $— 
The estimated fair value of financial instruments not carried at fair value in the Unaudited Condensed Consolidated Balance Sheets was as follows:
Level in fair value hierarchy
June 30, 2026
December 31, 2025
Carrying ValueFair ValueCarrying ValueFair Value
May 2025 Convertible Notes3$48,217 $73,165 $48,044 $123,000 
November 2025 Convertible Notes*
3317,895 454,543 530,096 586,237 
Equipment financing facility3— — 372 375 
Preferred Stock
3713,222 733,747 1,361,542 1,292,216 
DOE Loan Facility
387,723 97,072 84,327 95,427 
  Total$1,167,057 $1,358,527 $2,024,381 $2,097,255 
*Includes the embedded derivative liabilities for December 31, 2025.